Scottish retailers’ rates bills will rise by £7.6m tomorrow, as all firms occupying medium-sized and larger commercial premises face a rise of 1.7% in 2025-26.
This will take the business rate for these 22,070 premises, some 4,520 of which are shops, to a 26-year high, the highest level since devolution, according to the Scottish Retail Consortium.
In response to recent written parliamentary questions from South Scotland MSP Craig Hoy (below), Scottish Ministers have revealed that the 4,520 shops liable for the Intermediate and Higher Property Rates will see their rates bills rise by a total of £7.6m a year. This comes on top of the £31m rise in their rates bills in 2024-25.
Some 2,380 of these stores – those liable for the Higher Property Rate – will continue to pay a higher business rate than counterparts in England. This will be the tenth year in a row that rates have been higher than in England for all firms – regardless of sector – liable for the Higher Property Rate. These firms occupying larger premises in Scotland are set to pay collectively £54.7 million more than their equivalent-sized counterparts down south in the coming year.
Despite some welcome decisions in the Scottish Budget including a freeze in the Basic Property Rate, the rates burden remains onerous and at a 26-year high. The increase in business rates bills comes as a swathe of other statutory cost pressures are set to challenge the retail industry from April, including hikes to employers’ national insurance contributions.
David Lonsdale, Director of the Scottish Retail Consortium, said:
“Scottish retail sales and shopper footfall are at best flatlining and the economic outlook over the near term is uncertain. Yet despite this, medium-sized and larger shops in Scotland are set to stump up £7.6 million extra annually in tax from tomorrow as the business rate reaches a twenty-six year high.
“It comes as the retail industry is set to be thwacked by colossal additional employment costs as a result of the recent UK Budget. Public policy is loading new statutory costs onto the very stores which help underpin the health and viability of Scotland’s high streets and retail destinations. Increasing the cost of operating from stores only serves to make things even trickier for retailers striving to trade profitably.”
